Excess of Loss
Definition
Non-proportional reinsurance providing coverage for losses exceeding a specified retention amount. Can be per risk, per occurrence, or aggregate.
Practical Example
$5M xs $2M per occurrence excess of loss on commercial property.
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Related Terms
Catastrophe Excess of Loss reinsurance - A non-proportional reinsurance structure providing coverage for catastrophic events exceeding a specified retention. Commonly used for natural catastrophes like hurricanes and earthquakes.
Aggregate excess of loss reinsurance protecting the cedent when total losses exceed a specified aggregate retention in a period.